Credit card issuers typically profit from interest and finance charges paid by credit card holders who maintain a revolving balance. However, some credit card holders do not maintain a revolving balance and instead pay off their entire balances during each billing cycle. These credit card holders are commonly labeled “transactors”. Many of these transactors wait until very late in a billing cycle, and often until the last day of the billing cycle to pay off the balance. These transactors therefore use the credit card issuer to fund their purchases for an extended period of time. In fact, credit card holders with large monthly bills tend to wait longer to pay their bills in order to maximize their own interest earning capacity. For example, credit card holders with a monthly bill of $5000 or greater tend to wait until the due date to pay their credit bills. As a result of this behavior, credit issuers bear the cost of funding without the benefit of receiving any interest from the transactors.
Furthermore, these transactors seldom incur other fees such as late fees and fees for exceeding a pre-set credit limit. Although credit card issuers receive interchange revenues for all credit card users, these interchange revenues can be offset by other expenses, thereby rendering doing business with transactors entirely unprofitable. For example, transactors often select credit cards based on rewards and benefits that are offered to them for using their credit cards. These rewards and benefits provided may offset the interchange revenues obtained by the credit issuer, these rendering the transactor accounts entirely unprofitable. In some instances, depending on revolving balance, payment amounts, and payment dates, revolver accounts may also fail to provide sufficient profitability.
Thus, a solution is needed that identifies unprofitable transactor and revolver accounts and provides account features that are beneficial both to the credit card holder and the credit card issuer.